Exhibit 99

 

FOR IMMEDIATE RELEASE

 

3M Reports Strong Third-Quarter Results

 

- Company Again Raises Sales and Earnings Outlook on Positive Sequential Growth —

 

ST. PAUL, Minn. — Oct. 22, 2009 - 3M (NYSE: MMM) today announced third-quarter earnings of $1.35 per share on sales of $6.2 billion, with operating income margins of 23.9 percent (a). Sales and per-share earnings declined 5.6 percent and 4.3 percent year-on-year, respectively. On a sequential basis, sales and per-share earnings increased 8.3 percent and 20.5 percent, respectively, and operating income margins improved by 3.1 percentage points versus second quarter levels.  Free cash flow (i) for the third quarter was $1.6 billion, up 97 percent year-on-year.

 

Excluding special items (b-f), net income was $971 million and earnings were $1.37 per share, down 2.8 percent and 3.5 percent year-on-year, respectively. 3M’s Display and Graphics and Health Care businesses each delivered double-digit year-on-year profit improvements.  All business segments and all geographic regions reported sequential sales improvements.

 

“These results reflect the strength of 3M’s business model as we again delivered higher than expected sales, strong operating margins and outstanding free cash flow,” said George W. Buckley, 3M chairman, president and CEO.  “At the same time, we continued to invest in research and development, improving our supply chains and strengthening our brands and customer relationships, which will position us well as economies improve.”

 

For the second consecutive quarter, the company raised its 2009 earnings expectations.  3M now expects 2009 full-year earnings to be in the range of $4.50 to $4.55 per share, versus a prior range of $4.10 to $4.30.  The company also updated its 2009 organic sales volume expectations to a decline of 9.5 percent to 10.5 percent from a previous range of down 10 percent to down 13 percent. All estimates quoted exclude special items.

 

Key Financial Highlights

Third-quarter worldwide sales totaled $6.2 billion, a year-on-year decrease of 5.6 percent.  Local-currency sales including acquisitions decreased 3.3 percent, while currency translation effects reduced sales by 2.3 percent.

 

Local-currency sales including acquisitions increased 5.5 percent in Display and Graphics and 4.7 percent in Health Care, offset by declines of  2 percent in Safety, Security and Protection Services, 4.8 percent in Consumer and Office, 6.4 percent in Industrial and Transportation and 15.3 percent in Electro and Communications.  Excluding special items (b-f), third-quarter net income was $971 million, or $1.37 per share, versus $999 million, or $1.42 per share, in the third quarter of 2008.

 



 

Business Segment Highlights

(Operating income and margin figures exclude special items (b-f))

 

Industrial and Transportation

·                  Sales of $1.9 billion, down 6.4 percent year-on-year in local currency, including a 3 percent benefit from acquisitions; currency impacts reduced sales by 2.2 percent.

·                  Continued year-on-year declines in many large industrial markets, such as automotive OEM and home appliances, although quarter-on-quarter trends are improving.

·                  Double-digit local-currency growth in both the automotive aftermarket and renewable energy businesses.

·                  Sequential sales and operating income improved by 10.1 percent and 22.7 percent, respectively, led by the industrial adhesives and tapes and automotive OEM businesses.

·                  Operating income of $403 million, with strong operating margins of 21.2 percent.

 

Health Care

·                  Sales of $1.1 billion, up 4.7 percent year-on-year in local currency; currency impacts reduced sales by 3.1 percent.

·                  Local-currency sales growth led by the skin and wound care, infection prevention and oral care businesses; drug delivery local-currency sales were down year-on-year.

·                  Profits increased year-over-year in all businesses.

·                  All major geographic regions drove positive local-currency sales growth.

·                  Operating income increased 12 percent to $340 million and operating margins were 31.5 percent.

 

Consumer and Office

·                  Sales of $923 million, down 4.8 percent year-on-year in local currency, which includes 2.8 percentage points from acquisitions; currency impacts reduced sales by 1.8 percent.

·                  Double-digit local-currency sales declines in the office channel; high unemployment levels were a major factor.

·                  Overall soft consumer spending drove local-currency sales declines in the mass retail and do-it-yourself channels.

·                  Positive local-currency sales growth in both home care cleaning products and in consumer health care, driven by the recent acquisitions of Futuro® and ACE™ brands in the consumer health care market.

·                  Sales increased sequentially in most businesses, including consumer mass retail, home care cleaning and consumer health care businesses.

·                  Operating income of $227 million, with strong operating margins of 24.6 percent.

 

Display and Graphics

·                  Sales of $896 million, up 5.5 percent year-on-year in local currency, including 2.5 percentage points of growth from acquisitions; currency impacts reduced sales by 1 percent; sales rose 10.8 percent sequentially.

·                  Sales in optical systems rose 26 percent year-on-year and 27 percent sequentially, driven by new products for eco-friendly LCD displays along with overall improvement in LCD market volumes.

·                  Single-digit local-currency sales growth in traffic safety systems; business conditions in commercial graphics remain challenging.

·                  Operating income up 12 percent to $204 million, with margins of 22.8 percent.

 



 

Safety, Security and Protection Services

·                  Sales of $864 million, down 2 percent year-on-year in local currency; currency translation impacts reduced sales by 4.1 percent.

·                  Single-digit local-currency sales growth in security systems and in personal protective products, driven by H1N1-related respirator demand.

·                  Respirator manufacturing plants running at full capacity; adding new respirator capacity to address substantial near-term backlog.

·                  Difficult economic conditions continued to hurt sales of corrosion protection products.

·                  Operating income increased 9.8 percent to $236 million, with strong operating margins of 27.3 percent.

 

Electro and Communications

·                  Sales of $617 million, down 15.3 percent year-on-year in local currency; currency translation reduced sales by 0.9 percent.

·                  Sales impacted by continued weak market conditions in telecom and commercial construction; despite these challenges, sales and operating income improved sequentially in all major geographies.

·                  Operating income down 26 percent to $117 million, with margins of 19 percent.

·                  On a sequential basis, sales increased 12 percent and operating income increased 59 percent.

 

George W. Buckley and Patrick D. Campbell, senior vice president and chief financial officer, will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central Time) today. Investors can access a Webcast of this conference, along with related charts and materials, at http://investor.3M.com.

 



 

Forward-Looking Statements

This news release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) about the company’s financial results and estimates, business prospects, and products under development that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic and capital markets conditions; (2) the Company’s credit ratings and its cost of capital; (3) competitive conditions and customer preferences; (4) foreign currency exchange rates and fluctuations in those rates; (5) the timing and acceptance of new product offerings; (6) the availability and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (7) the impact of acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (8) generating fewer productivity improvements than estimated; and (9) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2008 and its subsequent Quarterly Reports on Form 10-Q (the “Reports”). Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under “Risk Factors” in Part I, Item 1A (Annual Report) and in Part II, Item 1A (Quarterly Report). The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

 

About 3M

A recognized leader in research and development, 3M produces thousands of innovative products for dozens of diverse markets. 3M’s core strength is applying its more than 40 distinct technology platforms — often in combination — to a wide array of customer needs. With $25 billion in sales, 3M employs 75,000 people worldwide and has operations in more than 60 countries.

 


 


3M Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

(Millions, except per-share amounts)

(Unaudited)

 

 

 

Three-months ended

 

Nine-months ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

Net sales

 

$

6,193

 

$

6,558

 

$

17,001

 

$

19,760

 

Operating expenses

 

 

 

 

 

 

 

 

 

Cost of sales

 

3,171

 

3,432

 

8,920

 

10,278

 

Selling, general and administrative expenses

 

1,209

 

1,269

 

3,642

 

3,938

 

Research, development and related expenses

 

335

 

344

 

967

 

1,058

 

(Gain) loss on sale of businesses

 

 

 

 

23

 

Total operating expenses

 

4,715

 

5,045

 

13,529

 

15,297

 

Operating income

 

1,478

 

1,513

 

3,472

 

4,463

 

Interest expense and income

 

 

 

 

 

 

 

 

 

Interest expense

 

55

 

52

 

165

 

158

 

Interest income

 

(8

)

(28

)

(26

)

(76

)

Total interest expense (income)

 

47

 

24

 

139

 

82

 

Income before income taxes

 

1,431

 

1,489

 

3,333

 

4,381

 

Provision for income taxes

 

460

 

479

 

1,040

 

1,402

 

Net income including noncontrolling interest

 

971

 

1,010

 

2,293

 

2,979

 

Less: Net income attributable to noncontrolling interest

 

14

 

19

 

35

 

55

 

Net income attributable to 3M (a)

 

$

957

 

$

991

 

$

2,258

 

$

2,924

 

Weighted average 3M common shares outstanding — basic

 

702.8

 

695.5

 

697.7

 

701.3

 

Earnings per share attributable to 3M common shareholders — basic

 

$

1.36

 

$

1.43

 

$

3.24

 

$

4.17

 

Weighted average 3M common shares outstanding — diluted

 

710.8

 

703.1

 

702.3

 

710.7

 

Earnings per share attributable to 3M common shareholders — diluted (a)

 

$

1.35

 

$

1.41

 

$

3.21

 

$

4.11

 

Cash dividends paid per 3M common share

 

$

0.51

 

$

0.50

 

$

1.53

 

$

1.50

 


(a)                 3M adopted a new accounting standard relating to the reporting of noncontrolling interest in partially owned consolidated subsidiaries effective January 1, 2009.  The new standard, among other things, changed the presentation format and certain captions of the consolidated income statement and consolidated balance sheet. 3M uses the captions recommended by this standard in its consolidated financial statements such as “net income attributable to 3M” and “earnings per share attributable to 3M common shareholders—diluted.” However, in the preceding release 3M has shortened this language to “net income” and “earnings per share” (or a slight variation thereof), respectively.

 



 

3M Company and Subsidiaries

SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Millions, except per-share amounts)

(Unaudited)

 

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the company also discusses non-GAAP measures that exclude special items. Operating income, net income attributable to 3M (hereafter referred to as “net income”), and diluted earnings per share attributable to 3M common shareholders (hereafter referred to as “diluted earnings per share”) are all measures for which 3M provides the reported GAAP measure and an adjusted measure (excluding special items). Special items are not in accordance with, nor are they a substitute for, GAAP measures. Special items represent significant charges or credits that are important to an understanding of the company’s ongoing operations. The company uses these non-GAAP measures to evaluate and manage the company’s operations. The company believes that discussion of results excluding special items provides a useful analysis of ongoing operating trends. The determination of special items may not be comparable to similarly titled measures used by other companies.

 

The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three-months and nine-months ended September 30, 2009.

 

 

 

Three-months ended

 

Nine-months ended

 

 

 

September 30, 2009

 

September 30, 2009

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

Diluted

 

 

 

Operating

 

Net

 

earnings

 

Operating

 

Net

 

earnings

 

 

 

income

 

income

 

per share

 

income

 

income

 

per share

 

Reported GAAP measure

 

$

1,478

 

$

957

 

$

1.35

 

$

3,472

 

$

2,258

 

$

3.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring activities (b)

 

26

 

14

 

0.02

 

209

 

128

 

0.18

 

Gain on sale of real estate (c)

 

 

 

 

(15

)

(9

)

(0.01

)

Adjusted Non-GAAP measure

 

$

1,504

 

$

971

 

$

1.37

 

$

3,666

 

$

2,377

 

$

3.38

 


(b)                 During the first three quarters of 2009, management approved and committed to undertake certain restructuring actions, which resulted in a net pre-tax charge for the three-months and nine-months ended September 30, 2009, of $26 million and $209 million, respectively. This charge related to employee-related liabilities for severance/benefits and other for the three-months ended September 30, 2009. Employee-related liabilities for severance/benefits and other of approximately $190 million and fixed asset impairments of approximately $19 million were recorded for the nine-months ended September 30, 2009, with all business segments impacted by these actions. For the

 



 

three-months ended September 30, 2009, these charges were recorded in cost of sales and research, development and related expenses, with these expenses totaling $25 million and $1 million, respectively. For the nine-months ended September 30, 2009, these charges were recorded in cost of sales; selling, general and administrative expenses; and research, development and related expenses, with these expenses totaling $110 million, $91 million and $8 million, respectively.

 

(c)                  In June 2009, 3M completed the sale of a New Jersey roofing granule facility and recorded a pre-tax gain of $15 million. This gain was recorded in cost of sales within the Safety, Security and Protection Services business segment.

 

The reconciliation provided below reconciles the non-GAAP operating income measure by business segment with the most directly comparable GAAP financial measure for the three-months and nine-months ended September 30, 2009. As discussed in more detail later in the section entitled “Business Segments,” 3M made certain changes to its business segments in the first quarter of 2009. Segment information for all periods presented has been reclassified to reflect these changes.

 

 

 

Three-months ended

 

Nine-months ended

 

 

 

September 30, 2009

 

September 30, 2009

 

OPERATING

 

Reported

 

 

 

Adjusted

 

Reported

 

 

 

Adjusted

 

INCOME BY

 

GAAP

 

Special

 

Non-GAAP

 

GAAP

 

Special

 

Non-GAAP

 

BUSINESS SEGMENT

 

measure

 

items

 

measure

 

measure

 

items

 

measure

 

Industrial and Transportation

 

$

382

 

$

21

 

$

403

 

$

841

 

$

88

 

$

929

 

Health Care

 

339

 

1

 

340

 

975

 

20

 

995

 

Consumer and Office

 

227

 

 

227

 

589

 

13

 

602

 

Safety, Security and Protection Services

 

236

 

 

236

 

544

 

2

 

546

 

Display and Graphics

 

206

 

(2

)

204

 

449

 

22

 

471

 

Electro and Communications

 

116

 

1

 

117

 

204

 

11

 

215

 

Corporate and Unallocated

 

(7

)

5

 

(2

)

(72

)

38

 

(34

)

Elimination of Dual Credit

 

(21

)

 

(21

)

(58

)

 

(58

)

Total Operating Income

 

$

1,478

 

$

26

 

$

1,504

 

$

3,472

 

$

194

 

$

3,666

 

 



 

The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three-months and nine-months ended September 30, 2008.

 

 

 

Three-months ended

 

Nine-months ended

 

 

 

September 30, 2008

 

September 30, 2008

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

Diluted

 

 

 

Operating

 

Net

 

earnings

 

Operating

 

Net

 

earnings

 

 

 

income

 

income

 

per share

 

income

 

income

 

per share

 

Reported GAAP measure

 

$

1,513

 

$

991

 

$

1.41

 

$

4,463

 

$

2,924

 

$

4.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on sale of businesses (d)

 

 

 

 

23

 

32

 

0.05

 

Exit activities (e)

 

49

 

36

 

0.05

 

68

 

50

 

0.07

 

Gain on sale of real estate (f)

 

(41

)

(28

)

(0.04

)

(41

)

(28

)

(0.04

)

Adjusted Non-GAAP measure

 

$

1,521

 

$

999

 

$

1.42

 

$

4,513

 

$

2,978

 

$

4.19

 


(d)                 In June 2008, 3M completed the sale of HighJump Software, a 3M company, to Battery Ventures, a technology venture capital and private equity firm. 3M received proceeds of $85 million for this transaction and recognized, net of assets sold, transaction and other costs, a pre-tax loss of $23 million in the second quarter of 2008 (recorded in the Safety, Security and Protection Services segment). This pre-tax loss was reported on a separate line of the Consolidated Statement of Income. 3M’s tax basis in HighJump Software was significantly lower than its book value, primarily related to the treatment of acquired goodwill. This resulted in a gain for tax purposes, which increased the provision for income taxes by $9 million.

 

(e)                  During the third quarter of 2008, management approved and committed to undertake certain exit activities, which resulted in a net pre-tax charge of $49 million. This charge primarily related to employee-related liabilities and fixed asset impairments, with actions taken in Display and Graphics, Industrial and Transportation, Health Care, Safety, Security and Protection Services, and Corporate. In the second quarter of 2008, the Company recorded pre-tax charges of $19 million related to exit activities. These charges related to employee reductions at an Industrial and Transportation manufacturing facility located in the United Kingdom.

 

(f)                   In March 2008, 3M entered into a sale-leaseback transaction relative to an administrative location in Italy. 3M anticipates leasing back the facility through late 2009 at which time a new location will be utilized. The vast majority of the proceeds were received in September 2008, which resulted in a pre-tax gain of approximately 29 million Euros ($41 million) in the third quarter of 2008. This gain was recorded in selling, general and administrative expenses in Corporate and Unallocated.

 


 


 

The reconciliation provided below reconciles the non-GAAP operating income measure by business segment with the most directly comparable GAAP financial measure for the three-months and nine-months ended September 30, 2008.

 

 

 

Three-months ended
September 30, 2008

 

Nine-months ended
September 30, 2008

 

OPERATING

 

Reported

 

 

 

Adjusted

 

Reported

 

 

 

Adjusted

 

INCOME BY

 

GAAP

 

Special

 

Non-GAAP

 

GAAP

 

Special

 

Non-GAAP

 

BUSINESS SEGMENT

 

measure

 

items

 

measure

 

measure

 

items

 

measure

 

Industrial and Transportation

 

$

415

 

$

11

 

$

426

 

$

1,334

 

$

30

 

$

1,364

 

Health Care

 

294

 

10

 

304

 

926

 

10

 

936

 

Consumer and Office

 

223

 

 

223

 

580

 

 

580

 

Safety, Security and Protection Services

 

212

 

3

 

215

 

594

 

26

 

620

 

Display and Graphics

 

162

 

20

 

182

 

535

 

20

 

555

 

Electro and Communications

 

158

 

 

158

 

460

 

 

460

 

Corporate and Unallocated

 

70

 

(36

)

34

 

96

 

(36

)

60

 

Elimination of Dual Credit

 

(21

)

 

(21

)

(62

)

 

(62

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Income

 

$

1,513

 

$

8

 

$

1,521

 

$

4,463

 

$

50

 

$

4,513

 

 



 

3M Company and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET (g)

(Dollars in millions)

(Unaudited)

 

 

 

Sept. 30,

 

Dec. 31,

 

Sept. 30,

 

 

 

2009

 

2008

 

2008

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,239

 

$

1,849

 

$

2,240

 

Marketable securities

 

697

 

373

 

727

 

Accounts receivable — net

 

3,638

 

3,195

 

3,763

 

Inventories

 

2,635

 

3,013

 

3,078

 

Other current assets

 

987

 

1,168

 

972

 

Total current assets

 

11,196

 

9,598

 

10,780

 

Marketable securities — non-current

 

519

 

352

 

652

 

Investments

 

106

 

111

 

119

 

Property, plant and equipment — net

 

6,923

 

6,886

 

6,809

 

Prepaid pension benefits (h)

 

41

 

36

 

1,684

 

Goodwill, intangible assets and other assets (h)

 

8,848

 

8,810

 

7,767

 

Total assets

 

$

27,633

 

$

25,793

 

$

27,811

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Short-term borrowings and current portion of long-term debt

 

$

921

 

$

1,552

 

$

2,257

 

Accounts payable

 

1,404

 

1,301

 

1,557

 

Accrued payroll

 

685

 

644

 

660

 

Accrued income taxes

 

540

 

350

 

563

 

Other current liabilities

 

2,216

 

1,992

 

1,963

 

Total current liabilities

 

5,766

 

5,839

 

7,000

 

Long-term debt

 

5,204

 

5,166

 

4,779

 

Pension and postretirement benefits (h)

 

2,058

 

2,847

 

1,307

 

Other liabilities

 

1,686

 

1,637

 

2,152

 

Total liabilities

 

14,714

 

15,489

 

15,238

 

Total equity — net (h)

 

12,919

 

10,304

 

12,573

 

Shares outstanding

 

 

 

 

 

 

 

September 30, 2009: 707,958,268 shares

 

 

 

 

 

 

 

December 31, 2008: 693,543,287 shares

 

 

 

 

 

 

 

September 30, 2008: 692,955,037 shares

 

 

 

 

 

 

 

Total liabilities and equity

 

$

27,633

 

$

25,793

 

$

27,811

 

 



 


(g)         Certain amounts in the prior years’ Consolidated Balance Sheet have been reclassified to conform to the current year presentation. As discussed in Note 1 in 3M’s Current Report on Form 8-K filed on May 13, 2009 (which updated 3M’s 2008 Annual Report on Form 10-K), 3M adopted accounting standards related to noncontrolling interest and convertible debt instruments, effective January 1, 2009. Both standards required retrospective application. In addition, 3M reclassified balance sheet amounts related to life insurance policies from investments to other assets and also reclassified current and non-current balance sheet amounts related to income taxes between deferred income taxes and accrued income taxes.

 

(h)         When comparing September 30, 2009, and December 31, 2008, to September 30, 2008, balance sheet amounts, the changes in 3M’s defined benefit pension and postretirement plans’ funded status, which is required to be measured as of each year-end, significantly impacted several balance sheet lines. This required annual measurement at December 31, 2008, decreased prepaid pension benefits’ assets by $1.7 billion, increased deferred taxes within other assets by $1.1 billion, increased non-funded pension and postretirement benefits’ long-term liabilities by $1.7 billion and decreased equity by $2.3 billion. Other pension and postretirement changes, such as contributions and amortization, also impacted these balance sheet captions. 3M made a non-cash U.S. pension contribution of approximately $600 million in shares of its common stock during the three-months ended September 30, 2009.

 



 

3M Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in millions)

(Unaudited)

 

 

 

Nine-months ended
September 30,

 

 

 

2009

 

2008

 

SUMMARY OF CASH FLOW:

 

 

 

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

$

3,897

 

$

3,408

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(629

)

(1,008

)

Acquisitions, net of cash acquired

 

(67

)

(834

)

Other investing activities

 

(380

)

(167

)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

(1,076

)

(2,009

)

Cash flows from financing activities:

 

 

 

 

 

Change in debt

 

(634

)

1,494

 

Purchases of treasury stock

 

(10

)

(1,597

)

Reissuances of treasury stock

 

291

 

257

 

Dividends paid to stockholders

 

(1,070

)

(1,052

)

Other financing activities

 

6

 

(5

)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

 

(1,417

)

(903

)

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

(14

)

(152

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

1,390

 

344

 

Cash and cash equivalents at beginning of period

 

1,849

 

1,896

 

Cash and cash equivalents at end of period

 

$

3,239

 

$

2,240

 

 



 

3M Company and Subsidiaries

SUPPLEMENTAL CASH FLOW AND

OTHER SUPPLEMENTAL FINANCIAL INFORMATION

(Dollars in millions)

(Unaudited)

 

 

 

Nine-months ended
September 30,

 

 

 

2009

 

2008

 

NON-GAAP MEASURES

 

 

 

 

 

Free Cash Flow:

 

 

 

 

 

Net cash provided by operating activities

 

$

3,897

 

$

3,408

 

Purchases of property, plant and equipment

 

(629

)

(1,008

)

Free Cash Flow (i)

 

$

3,268

 

$

2,400

 


(i)             Free cash flow is not defined under U.S. generally accepted accounting principles (GAAP). Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is a useful measure of performance and uses this measure as an indication of the strength of the company and its ability to generate cash. 

 

 

 

September 30,

 

 

 

2009

 

2008

 

OTHER NON-GAAP MEASURES:

 

 

 

 

 

Net Working Capital Turns (j)

 

5.1

 

5.0

 


(j)             The company uses various working capital measures that place emphasis and focus on certain working capital assets and liabilities. 3M’s net working capital index is defined as quarterly net sales multiplied by four, divided by ending net accounts receivable plus inventory less accounts payable. This measure is not recognized under U.S. generally accepted accounting principles and may not be comparable to similarly titled measures used by other companies.

 


 


3M Company and Subsidiaries

SALES CHANGE ANALYSIS

(Unaudited)

 

Sales Change Analysis

By Geographic Area

 

 

 

Three-Months Ended September 30, 2009

 

 

 

United

 

 

 

Asia-

 

Latin
America/

 

World-

 

 

 

States

 

Europe

 

Pacific

 

Canada

 

Wide

 

Volume — organic

 

(12.4

)%

(7.9

)%

2.6

%

(9.0

)%

(7.1

)%

Price

 

2.1

 

2.0

 

(1.7

)

10.0

 

2.0

 

Organic local-currency sales

 

(10.3

)

(5.9

)

0.9

 

1.0

 

(5.1

)

Acquisitions

 

2.0

 

3.5

 

0.3

 

0.8

 

1.8

 

Local-currency sales

 

(8.3

)

(2.4

)

1.2

 

1.8

 

(3.3

)

Divestitures

 

 

(0.1

)

 

 

 

Translation

 

 

(6.8

)

1.8

 

(8.7

)

(2.3

)

Total sales change

 

(8.3

)%

(9.3

)%

3.0

%

(6.9

)%

(5.6

)%

 

Worldwide

Sales Change Analysis

By Business Segment

 

 

 

Three-Months Ended September 30, 2009

 

 

 

Organic

 

 

 

 

 

 

 

 

 

 

 

 

 

local-

 

 

 

Local-

 

 

 

 

 

Total

 

 

 

currency

 

Acqui-

 

currency

 

Divest-

 

Trans-

 

sales

 

 

 

sales

 

sitions

 

sales

 

itures

 

lation

 

change

 

Industrial and Transportation

 

(9.4

)%

3.0

%

(6.4

)%

%

(2.2

)%

(8.6

)%

Health Care

 

4.4

%

0.3

%

4.7

%

%

(3.1

)%

1.6

%

Consumer and Office

 

(7.6

)%

2.8

%

(4.8

)%

%

(1.8

)%

(6.6

)%

Safety, Security and Protection Services

 

(2.1

)%

0.1

%

(2.0

)%

%

(4.1

)%

(6.1

)%

Display and Graphics

 

3.0

%

2.5

%

5.5

%

%

(1.0

)%

4.5

%

Electro and Communications

 

(15.9

)%

0.6

%

(15.3

)%

(0.3

)%

(0.9

)%

(16.5

)%

 



 

Sales Change Analysis

By Geographic Area

 

 

 

Nine-Months Ended September 30, 2009

 

 

 

 

 

 

 

 

 

Latin

 

 

 

 

 

United

 

 

 

Asia-

 

America/

 

World-

 

 

 

States

 

Europe

 

Pacific

 

Canada

 

Wide

 

Volume — organic

 

(15.5

)%

(14.4

)%

(9.5

)%

(12.6

)%

(13.2

)%

Price

 

2.7

 

1.9

 

(1.9

)

9.4

 

2.0

 

Organic local-currency sales

 

(12.8

)

(12.5

)

(11.4

)

(3.2

)

(11.2

)

Acquisitions

 

2.8

 

4.0

 

0.6

 

1.6

 

2.4

 

Local-currency sales

 

(10.0

)

(8.5

)

(10.8

)

(1.6

)

(8.8

)

Divestitures

 

(0.3

)

(0.1

)

 

 

(0.2

)

Translation

 

 

(11.5

)

(1.3

)

(13.2

)

(5.0

)

Total sales change

 

(10.3

)%

(20.1

)%

(12.1

)%

(14.8

)%

(14.0

)%

 

Worldwide

Sales Change Analysis

By Business Segment

 

 

 

 

Nine-Months Ended September 30, 2009

 

 

 

Organic

 

 

 

 

 

 

 

 

 

 

 

 

 

local-

 

 

 

Local-

 

 

 

 

 

Total

 

 

 

currency

 

Acqui-

 

currency

 

Divest-

 

Trans-

 

sales

 

 

 

sales

 

sitions

 

sales

 

itures

 

lation

 

change

 

Industrial and Transportation

 

(17.3

)%

3.0

%

(14.3

)%

%

(4.8

)%

(19.1

)%

Health Care

 

1.7

%

1.2

%

2.9

%

%

(6.6

)%

(3.7

)%

Consumer and Office

 

(5.1

)%

2.4

%

(2.7

)%

%

(4.4

)%

(7.1

)%

Safety, Security and Protection Services

 

(8.9

)%

3.4

%

(5.5

)%

(1.1

)%

(6.9

)%

(13.5

)%

Display and Graphics

 

(10.6

)%

3.0

%

(7.6

)%

%

(2.7

)%

(10.3

)%

Electro and Communications

 

(23.6

)%

0.6

%

(23.0

)%

(0.1

)%

(3.2

)%

(26.3

)%

 



 

3M Company and Subsidiaries

BUSINESS SEGMENTS

(Dollars in millions)

(Unaudited)

 

Effective in the first quarter of 2009, 3M made certain changes to its business segments in its continuing effort to drive growth by aligning businesses around markets and customers. Segment information for all periods presented has been reclassified to reflect this new segment structure. Refer to 3M’s Current Report on Form 8-K filed May 13, 2009, which updated 3M’s Annual Report on Form 10-K filed February 17, 2009, for discussion of these changes.

 

BUSINESS

SEGMENT

INFORMATION

(Millions)

 

 

 

Three-months ended

 

Nine-months ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

NET SALES

 

 

 

 

 

 

 

 

 

Industrial and Transportation

 

$

1,901

 

$

2,078

 

$

5,208

 

$

6,438

 

Health Care

 

1,083

 

1,066

 

3,145

 

3,266

 

Consumer and Office

 

923

 

988

 

2,584

 

2,782

 

Safety, Security and Protection Services

 

864

 

921

 

2,352

 

2,721

 

Display and Graphics

 

896

 

857

 

2,315

 

2,581

 

Electro and Communications

 

617

 

740

 

1,648

 

2,235

 

Corporate and Unallocated

 

4

 

6

 

12

 

21

 

Elimination of Dual Credit

 

(95

)

(98

)

(263

)

(284

)

Total Company

 

$

6,193

 

$

6,558

 

$

17,001

 

$

19,760

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 

 

 

 

 

 

 

Industrial and Transportation

 

$

382

 

$

415

 

$

841

 

$

1,334

 

Health Care

 

339

 

294

 

975

 

926

 

Consumer and Office

 

227

 

223

 

589

 

580

 

Safety, Security and Protection Services

 

236

 

212

 

544

 

594

 

Display and Graphics

 

206

 

162

 

449

 

535

 

Electro and Communications

 

116

 

158

 

204

 

460

 

Corporate and Unallocated

 

(7

)

70

 

(72

)

96

 

Elimination of Dual Credit

 

(21

)

(21

)

(58

)

(62

)

Total Company

 

$

1,478

 

$

1,513

 

$

3,472

 

$

4,463

 

 

For the three-months and nine-months ended September 30, 2009 and September 30, 2008, refer to the preceding notes (b—f) and the preceding reconciliation of operating income by business segment for a discussion and summary of items that impacted reported business segment operating income.

 



 

Investor Contacts:

Matt Ginter

 

Media Contact:

 

Jacqueline Berry

 

3M

 

 

 

3M

 

(651) 733-8206

 

 

 

(651) 733-3611

 

 

 

 

 

 

 

Bruce Jermeland

 

 

 

 

 

3M

 

 

 

 

 

(651) 733-1807

 

 

 

 

 

From:

3M Public Relations and Corporate Communications

3M Center, Building 225-1S-15

St. Paul, MN 55144-1000